Gold pushed ahead after the Federal Reserve minutes reiterated that interest rate hikes, when they do arrive, will likely be slow and steady.
The Fed hinted that a rate hike could take place this year, which would normally be seen as bad for gold, as it is a non-interest yielding asset.
FXTM Research Analyst Lukman Otunuga said Fed futures, a marker on the likelihood of a rate hike, “shows a near 70% probability of the Fed acting to raise rates [this year].”
But with interest rates currently so low, small and infrequent rises will have little effect on the metal’s price, analysts said.
Mike van Dulken, Head of Research at Accendo Markets Markets pointed out that “that there is still room for delay and that any further rate rises will be very measured.”
Gold was trading US$13 higher, or 1.2% to US$1,082 on the news.
Bullion trader Marex Spectron, however, said the movement in the gold price was more likely a resulting of short covering by investors.
“The lack of any definitive news seemed to slightly disappoint the markets and with most participants running long dollars and short precious metals, covering was seen,” it said.
Elsewhere, silver was 1.1% higher to US$14.34 and platinum rose US$6 or 0.7% to US$855.
Randgold Resources up 125p to 4,058p
Fresnillo up 5p to 696p
Anglo American up 0.1p to 449p.